Ex-USC Economics Prof Accused of Scamming Saudi Student out of $88 Million

Investment banker, ex-University of Southern California (USC) economics professor, photographer and comic book creator (pdf) Dr. Ayman Kandeel was sued in Los Angeles County Superior Court by a former student who claims he was scammed out of $88 million.

The lawsuit, filed on behalf of Jarallah al-Jarallah, alleges the Egyptian national committed securities fraud, negligent misrepresentation and other misdeeds when he convinced his Saudi Arabian economics student to invest his father’s money in his teacher’s private equity fund, according to Courthouse News Service.

They formed Pi Capital, Inc. in 2006 and fittingly billed it, at the beginning of the worldwide economic crash, as “helping companies raise capital during tough economic times.” Its website promotes a “presence” in Dubai, Cairo and Riyadh, while “currently establishing representation in Moscow, London and Almaty.”

The suit claims that Kandeel promised a return of 20% and that 80% of the money would be invested in safe fixed-income assets. After being asked to invest another $25 million, al-Jarallah asked to see the books and was told in January 2013 that there was no money left from the initial investment, according to the suit, which calls it a “classic scam.”

Kandeel is named as a defendant in the lawsuit along with 13 companies formed “to facilitate the fraud.”

Kandeel holds a bachelor’s degree in economics from Cairo University, master’s degrees from American University of Cairo in 1994 and UC Santa Barbara, and a doctorate in financial markets from the University of Southern California.

A lifelong fan of comic books, he created AK Comics in 2001 and populated it with four Mideast superhero role models to ostensibly fill a gap in a literary fantasy world inhabited solely by Western creations. The comic superheroes are Muslim, Jewish and Christian, although the reader is not supposed to be able to tell which is which. They protect the Mideast against conspiracies that would disrupt the peace, according to Kandeel’s profile at Borak Holding, a diversified company he created in Cairo in 2005 with a primary focus on investments in Egypt.